Yelp(YELP) - 2025 Q2 - Quarterly Results

Yelp Q2 2025 Earnings Highlights and Outlook This section details Yelp's strong Q2 2025 financial performance, management's strategic insights, and revised full-year financial outlook Q2 2025 Financial Highlights Yelp achieved strong financial performance in Q2 2025, with record net revenue, significant growth in net income and Adjusted EBITDA, and improved profitability Key Financial Data for Q2 2025 | Metric | Q2 2025 | Q2 2024 | YoY Change | | :----- | :------ | :------ | :--------- | | Net Revenue | $370 million | $357 million | +4% | | Net Income | $44 million | $38 million | +16% | | Net Income Margin | 12% | 11% | +1 pp | | Adjusted EBITDA | $100 million | $91 million | +10% | | Adjusted EBITDA Margin | 27% | 26% | +1 pp | - Net revenue increased by 4% year-over-year to a record $370 million[1] - Net income grew by 16% year-over-year to $44 million, with a 12% margin[1] - Adjusted EBITDA increased by 10% year-over-year to $100 million, achieving a 27% margin[1] Management Commentary Management highlighted effective execution of the product-led strategy, positive progress in AI initiatives, and a commitment to profitable growth and long-term shareholder value amidst macroeconomic uncertainty - CEO Jeremy Stoppelman stated that Q2 results reflect solid execution of the product-led strategy, with encouraging momentum from AI initiatives, including the rollout of Yelp Assistant and testing of Yelp Host[2] - CFO David Schwarzbach noted record net revenue and strong profitability, with improved net income and Adjusted EBITDA margins, committing to long-term financial performance through disciplined financial approaches and product investments in an uncertain macroeconomic environment[2] Business Outlook Yelp narrowed its full-year 2025 net revenue and Adjusted EBITDA guidance ranges Full-Year 2025 Financial Outlook (Revised) | Metric | 2025 Outlook (Revised) | | :----- | :--------------------- | | Net Revenue | $1.465 billion to $1.475 billion | | Adjusted EBITDA | $350 million to $360 million | - The 2025 net revenue outlook was narrowed to $1.465 billion to $1.475 billion[1] - The 2025 Adjusted EBITDA outlook was narrowed to $350 million to $360 million[1] Company Overview and Forward-Looking Statements This section provides an overview of Yelp Inc. and outlines forward-looking statements, highlighting potential risks and uncertainties About Yelp Yelp Inc., founded in 2004, is a community-driven platform connecting users with local businesses through information, reviews, and tools for discovery and transactions - Yelp Inc. is a community-driven platform connecting people with great local businesses[5] - Millions of users rely on Yelp for local business information, reviews, and photos to aid purchasing decisions[5] - Founded in 2004, Yelp provides a one-stop local platform for consumers to interact with businesses[5] Forward-Looking Statements This section contains forward-looking statements regarding Yelp's future performance, cautioning that actual results may differ significantly due to various risks and uncertainties, including macroeconomic conditions and operational challenges - This press release contains forward-looking statements regarding Yelp's future performance, based on current expectations, forecasts, and assumptions, involving risks and uncertainties[7] - Actual results may differ materially from projected or implied outcomes due to factors such as macroeconomic uncertainties (e.g., inflation, interest rates, labor and supply chain issues, severe weather events) and their impact on consumer behavior, user activity, and advertiser spending[8][9] - Other risk factors include Yelp's ability to maintain and grow its advertiser base, drive sustained growth through strategic initiatives, operate effectively and retain key talent in a primarily remote work model, and generate and maintain high-quality user content[9] Condensed Consolidated Financial Statements This section presents Yelp's condensed consolidated balance sheets, statements of operations, and cash flows, detailing financial position and performance Condensed Consolidated Balance Sheets As of June 30, 2025, Yelp's total assets and liabilities slightly decreased from year-end 2024, while total stockholders' equity marginally increased Condensed Consolidated Balance Sheets Overview (in thousands) | Metric | June 30, 2025 | December 31, 2024 | Change | | :-------------------- | :------------ | :---------------- | :----- | | Total Assets | $980,175 | $983,567 | $(3,392) | | Total Liabilities | $233,771 | $239,598 | $(5,827) | | Total Stockholders' Equity | $746,404 | $743,969 | $2,435 | - Cash and cash equivalents were $197,687 thousand as of June 30, 2025, a decrease from $217,325 thousand as of December 31, 2024[11] - Total current assets decreased from $516,879 thousand at year-end 2024 to $509,411 thousand at mid-2025[11] Condensed Consolidated Statements of Operations Yelp achieved significant growth in net revenue, income from operations, and net income for both Q2 and YTD 2025, with corresponding EPS increases, driven by improved operating efficiency and reduced stock-based compensation Condensed Consolidated Statements of Operations Key Data (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | YTD 2025 | YTD 2024 | YoY Change (YTD) | | :------------------------------------ | :------ | :------ | :-------------- | :------- | :------- | :--------------- | | Net Revenue | $370,394 | $357,016 | +3.75% | $728,928 | $689,768 | +5.68% | | Income from Operations | $53,290 | $39,747 | +34.07% | $82,750 | $50,964 | +62.37% | | Net Income | $44,089 | $38,036 | +15.91% | $68,480 | $52,190 | +31.22% | | Basic EPS | $0.69 | $0.56 | +23.21% | $1.06 | $0.77 | +37.66% | | Diluted EPS | $0.67 | $0.54 | +24.07% | $1.03 | $0.73 | +41.10% | - Total costs and expenses for Q2 2025 were $317,104 thousand, largely flat compared to $317,269 thousand in the prior-year period[13] - Stock-based compensation expense decreased to $34,775 thousand in Q2 2025 from $41,214 thousand in the prior-year period[13] Condensed Consolidated Statements of Cash Flows For the six months ended June 30, 2025, Yelp saw a substantial increase in cash flow from operating activities, alongside increased cash outflows from investing and financing activities, resulting in a decrease in period-end cash and cash equivalents Condensed Consolidated Statements of Cash Flows Key Data (in thousands) | Metric | YTD June 30, 2025 | YTD June 30, 2024 | YoY Change | | :------------------------------------ | :---------------- | :---------------- | :--------- | | Net cash provided by operating activities | $156,029 | $112,544 | +38.64% | | Net cash used in investing activities | $(26,620) | $(23,046) | +15.51% | | Net cash used in financing activities | $(151,582) | $(150,411) | +0.78% | | Cash, cash equivalents & restricted cash (End of period) | $198,160 | $252,794 | -21.54% | - Net cash provided by operating activities increased from $112,544 thousand in H1 2024 to $156,029 thousand in H1 2025[15] - Net cash used in investing activities was primarily for purchases of marketable securities and property, equipment, and software[15] - Net cash used in financing activities was primarily impacted by common stock repurchases of $128,450 thousand and tax payments related to net share settlement of equity awards of $35,155 thousand[15] Non-GAAP Financial Measures and Reconciliations This section defines Yelp's non-GAAP financial measures and provides detailed reconciliation tables to GAAP results Non-GAAP Financial Measures This section defines Yelp's non-GAAP financial measures, including Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow, emphasizing their inherent limitations as analytical tools and their non-substitutability for GAAP results - Adjusted EBITDA is defined as net income (loss) adjusted for provision for income taxes, other income, net, depreciation and amortization, stock-based compensation expense, and certain other non-recurring items[16] - Free cash flow is defined as net cash provided by (used in) operating activities less cash paid for purchases of property, equipment, and software[16] - Non-GAAP financial measures, such as Adjusted EBITDA and Free Cash Flow, have limitations and should not be considered as substitutes for or superior to GAAP net income (loss) or net cash provided by operating activities[17][19] Non-GAAP Reconciliations The report provides detailed reconciliation tables for net income to Adjusted EBITDA and net cash from operating activities to free cash flow for Q2 and YTD 2025, illustrating the calculation of non-GAAP metrics Non-GAAP Reconciliations Key Data (in thousands, except percentages) | Metric | Q2 2025 | Q2 2024 | YoY Change (Q2) | YTD 2025 | YTD 2024 | YoY Change (YTD) | | :-------------------------------------- | :------ | :------ | :-------------- | :------- | :------- | :--------------- | | Adjusted EBITDA | $100,485 | $91,115 | +10.28% | $185,429 | $155,571 | +19.19% | | Adjusted EBITDA margin | 27% | 26% | +1 pp | 25% | 23% | +2 pp | | Free cash flow | $45,010 | $30,102 | +49.52% | $132,474 | $95,970 | +37.99% | - Key adjustments for Adjusted EBITDA primarily include adding back stock-based compensation of $34,775 thousand and depreciation and amortization of $12,365 thousand for Q2 2025[20] - Free cash flow is primarily calculated by subtracting purchases of property, equipment, and software of $13,024 thousand from net cash provided by operating activities for Q2 2025[20]